How to set up your payroll for the new tax year

Are you an employer running payroll and operating
PAYE? You need to make sure your payroll software
and employee payroll records are ready for the new tax year starting on 6 April.
Your payroll software should be updated so it uses the latest rates and thresholds for
Income Tax, National Insurance, and student loan repayments.
If you’re using HMRC’s Basic PAYE Tools, check your ‘Settings’ to make sure you
have ‘Automatic update?’ selected. For each employee working for you on 6 April,
you’ll need a payroll record including their correct and up-to-date tax code.
HMRC will tell you between January and March about any changes to your employees’ tax
codes for the new tax year starting on 6 April. Most employees’ tax codes will change because
their personal tax allowances increase for the new tax year.
This usually means you carry forward their current tax code to the new tax year – but
you’ll need to update it for any changes to the tax rates or allowances.
You can find details of the annual tax code changes on HMRC’s online form P9X.
HMRC will send you a reminder to check the online P9X if you’ve signed up for employer
email alerts, but you can search GOV.UK for “P9X” at any time.
If there are any other changes to an employee’s tax code, HMRC will send you a form P9T.
If you get a P9T for an employee, use the new tax code shown on the P9T instead of the one on the P9X. Most employers now get their P9Ts online,
so it’s quicker and easier than ever to find or to change your employees’ tax codes.
Check your payroll software user guide for more help with setting up your payroll for the new tax year. And visit the GOV.UK webpage on ‘Payroll:
annual reporting and tasks’ for more information. Thanks for watching.